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February 2018

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Pakistan's Ministry of Textiles has been asked by the National Assembly Standing Committee to initiate steps to set up a separate Export Development Fund (EDF), which would be used to boost the country's textile exports.

The Standing Committee was informed that the textile sector alone fetched foreign exchange worth US$ 12 billion during last year and significantly contributed to the EDF, but around 40 percent of the textile sector's own contribution was not utilized to boost its exports.

Considering this, the Committee arrived at a conclusion that as the Government has permitted formation of a separate Ministry of Textiles, different from the Ministry of Commerce, EDF for textiles sector should also be separated in order to ensure that the textiles EDF is utilised for promotion of the much valuable sector.

Several textile association representatives revealed that around PKR 23 billion were accumulated in the EDF by now, but in the absence of any specific norms, most of these sums were utilized for political purposes.

They called upon the Government to constitute a special Board for EDF in the Textile Ministry comprising of representatives of different textile industry associations.

Besides, they also urged the Committee that a part of the EDF should be spent towards facilitating textile exporters.

EDF's Abrar Aalam informed the Committee that there are set norms for utilisation of the funds generated from exports of all items including textiles.

As per the norms set under the EDF Act, 1999, the funds so accumulated can be utilised for 12 specified categories, and also the EDF Board comprises of concerned representatives of all the sectors, including textiles, he added.

Against this, representatives of several textile industry stakeholders stated before the Committee that the EDF Board refused their request for acquiring Effluent Treatment Plant (ETP), which is a basic requirement for complying with social responsibility norms by several overseas countries.

If the Government is unable to install the ETP, foreign economies may discontinue importing goods from Pakistan, which would prove highly detrimental for the country.

They, thus, stated that if the Textile Ministry institutes its separate EDF, compliance with such international norms would become easier.